Vacancy Tax (VT)

The Vacancy Tax was approved by San Francisco voters on March 3, 2020 and becomes effective on January 1, 2022.  The Vacancy Tax is a tax on keeping certain commercial space vacant for more than 182 days (approximately six months) of a calendar year.

For most entities, filing and payment of the Vacancy Tax will begin in 2023. 

For purposes of the Vacancy Tax, Taxable Commercial Space is defined as the ground floor of any building or portion of a building where the ground floor is all of the following:

  1. Located in one of the Named Neighborhood Commercial Districts or Named Neighborhood Commercial Transit Districts, as they existed on March 3, 2020; and
  2. Adjacent or tangent to a Public Right of Way (i.e., facing the street); and
  3. Not Residential Real Estate.

The Vacancy Tax is payable by:

  1. The owner of the space, provided that the space is not leased;
  2. The lessee of the space, provided that the space is not subleased; and
  3. The sublessee of the space if the space is subleased.

Each owner, lessee, and sublessee of Taxable Commercial Space in the City is required to file a Vacancy Tax Return annually, regardless of whether the owner, lessee, or sublessee has kept the Taxable Commercial Space vacant, and regardless of whether another owner, lessee, or sublessee is liable for the tax. 

The Vacancy Tax rate is calculated based on a building’s frontage (the total length of commercial space facing the Public Right of Way) and the number of calendar years beginning in 2022 that the Taxable Commercial Space is kept vacant for more than 182 days.

Calendar Years Vacant

Rate per linear foot

1st year*


2nd year


3rd year or more


*beginning in 2022

If a lessee has operated a business in Taxable Commercial Space for more than 182 consecutive days during a lease of at least two years, the lessee will not be liable for the Vacancy Tax for the remainder of that lease, regardless of whether the space is vacant.

Additionally, any organization that is exempt from income taxation under Internal Revenue Code Section 501(c)(3) is exempt from the Vacancy Tax.

However, the owner, lessee, or sublessee of a Taxable Commercial Space must file a Vacancy Tax return regardless of whether they are exempt from paying the Vacancy Tax or other taxes.

Taxable Commercial Space is considered kept vacant if it’s unoccupied, uninhabited, or unused for more than 182 days, whether consecutive or nonconsecutive, in a calendar year.

Taxable Commercial Space will NOT be considered kept vacant during the following periods:

  • Building Permit Application Period – the period between the date that an application for a building permit for repair, rehabilitation, or construction is filed and the date that the Department of Building Inspection grants or denies that application.   This period may not exceed one year, and if more than one application is filed for the same Taxable Commercial Space, only the first application will trigger a Building Permit Application Period.
  • Construction Period – a one-year period after the city issues a building permit for repair, rehabilitation, or construction.  If more than one such permit is issued, only the issuance of the first building permit will trigger this one-year period.
  • Conditional Use Application Period – the 183-day period after a complete application for a conditional use permit is filed. If the Planning Commission has not granted or denied the application within 183 days, this period is extended to December 31 of the year in which 183 days from the application filing date falls.  If more than one complete conditional use permit application is filed, only the first complete application will trigger this Conditional Use Application Period.
  • Disaster Period – the two-year period following the date that a Taxable Commercial Space is severely damaged and made uninhabitable or unusable because of fire, natural disaster, or other catastrophic event.

Article 29: Vacancy Tax Ordinance

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